Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-09-22-Speech-1-093"
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"en.20080922.19.1-093"2
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"Ladies and gentlemen, six years ago we launched the global harmonisation of accounting rules and competitiveness in the European banking sector. The Union’s cross-border financial integration has no equivalent in the world. Financial researchers have long been pointing out that the European Union is far from being sufficiently equipped with mechanisms for solving cross-border crises arising from the increasing interdependence of European banks and their links to the global financial markets. Although the European Central Bank has managed to maintain financial stability in the eurozone to date, the fragmented national regulatory bodies are not capable of implementing effective solutions to the cross-border banking crises we continue to experience. In other words, centralised control is crucial. However, rather than establishing an all-encompassing financial regulator, we should carefully define specific conditions for intervention by a pan-European financial regulator. State intervention in investments banks such as AIG also arouses fears that such a precedent will lead to banks behaving irresponsibly in the future.
I am therefore convinced that we must introduce control mechanisms that will prevent the managers of investment and hedge funds from making ill-judged analyses of operational and systemic risks. For example, hedge funds and private equity should not be able to finance long-term investments through short-term loans without setting the minimum amount of their capital stock, according to the level of risk of their activities. The way mortgages have been financed not only in the US but also in the United Kingdom and Spain serve as a warning that the European financial markets are due some fundamental self-reflection, which will, I am afraid, be just that little bit too late. Even if the European Commission came up with concrete binding legislation tomorrow, it would be implemented not in calm conditions but in a stormy and possibly hysterical atmosphere. In any case, there is also the question of how acceptable the legislation would be to the Council."@en1
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